Ecosystem Services – A New Tool for Mitigating Water Development?

Posted on April 9, 2012 by Martha Pagel

The use of ecosystem services as a tool for compensatory mitigation is off to a slow start in Oregon.  It remains to be seen whether state agencies will effectively embrace and implement this relatively new approach to setting priorities and standards for mitigation programs. A specific question from the standpoint of water use and development is whether a wide range of ecosystem services can be used as an alternative to “bucket-for-bucket” in-stream flow replacement as mitigation to offset new water development.

The concept of ecosystem services – defined as “the benefits human communities enjoy as a result of natural processes and biodiversity” – has been recognized in Oregon law since 2009. (ORS 468.581(3)). The law establishes a general policy to support the maintenance, enhancement and restoration of ecosystem services in Oregon (ORS 468.583). Agencies are “encouraged” to use ecosystem services markets as a means to meet mitigation needs for various programs, and are directed to consider mitigation strategies that recognize the need for biological connectivity and ecological restoration efforts at a landscape scale rather than exercise an “automatic preference for on-site, in-kind mitigation” in making mitigation decisions (ORS 468.587(2)). See “Adventures in Water Quality Mitigation” for additional background.

Despite this policy and directive, the Oregon Water Resources Department (OWRD) has not yet taken any actions to modify its mitigation policies relating to issuance of new water right permits.  Under long-standing procedures, OWRD requires mitigation for new uses that are determined to have the potential to interfere with in-stream flows needed for fish that are listed as sensitive, threatened or endangered under state or federal programs.  (OAR Chapter 690, Division 33).

The need for mitigation arises most often in the context of reviewing applications for new ground water use. When the ground water source is determined to be in hydraulic connection to surface waters providing habitat for the listed fish species, mitigation may be required to offset the expected surface water depletion. Based on guidance from a biological opinion issued in a specific water right permit matter some years back, OWRD typically requires “bucket-for-bucket” mitigation in the form of in-stream flow restoration at or above the stream reach that will be affected by the ground water use. 

Applicants generally obtain mitigation water by acquiring and cancelling other existing water rights for surface water use.  In practice, the system results in a de facto cap and trade program, conditioning approval of new water rights on the cancellation of existing rights. 

In a few regions of the state – most notably the Deschutes Basin in Central Oregon – the bucket-for-bucket replacement approach works because mitigation water is generally available through voluntary markets.  This somewhat unique set of circumstances arises because of population growth and land use changes in an area of relatively marginal farming productivity.  As farm lands are converted to housing and urban uses in and near the cities Bend, Redmond and Prineville, the existing water rights become available for mitigation purposes.

In other parts of the state – most notably the highly productive and water-efficient farming region in the mid-Columbia Basin – the fact situation is quite different.  There is very little mitigation water available because existing water rights are needed to maintain existing agricultural production levels.  The frustration for economic development interests is exacerbated by the enormous volume of flow in the Columbia River and huge reservoir pools created by the federal hydropower system, both of which are untouchable because of the regulatory limitations on new withdrawals.   

The issue of ecosystem services as a potential alternative for mitigation took center stage briefly in the 2012 legislative session – but the discussion resulted in no action. HB 4126 would have spurred availability of ecosystem services markets by focusing on improved methodologies for quantifying and applying ecosystem services “credits.” Another bill that was hotly debated but eventually died in committee was focused directly on the Columbia Basin problems.  HB 4101 would have required OWRD to “consider new mitigation options for new surface water diversions” in the Columbia River Basin. The mitigation wording was specifically intended to open the door for alternatives to the “bucket-for-bucket” approach.  By putting the ecosystem services concept to work, mitigation alternatives could reasonably include investment in high value habitat restoration, including temperature reduction or other water quality improvements in priority tributaries to offset direct withdrawals from the Columbia River. 

For many of us directly involved in the Columbia River debates in Oregon, this new approach could be a key to unlocking access to the river for new economic use.  Without this policy change, Oregon water uses will continue to see little or no new irrigation development in the area because of the lack of traditional mitigation sources.  The Governor and legislative leadership are already working on a revival of the HB 4101 discussion in 2013.

The Sackett Effect

Posted on April 6, 2012 by Paul Seals

On Friday, March 30, the United States Environmental Protection Agency (“EPA”) announced that the agency was withdrawing its December 7, 2010 Imminent and Substantial Endangerment Administrative Order (“AO ”) issued unilaterally to Range Resources Corporation and Range Resources Production Company (“Range”).  With much fanfare and national media attention, EPA issued the AO to address the contamination of two water wells in North Central Texas.  EPA alleged that the source of the contamination was from Range’s oil and gas activities, including hydraulic fracturing, in the Barnett Shale Formation.  Range has challenged EPA’s action with pending litigation in the Northern District of Texas and in the Fifth Circuit.  Was EPA’s decision to withdraw its AO an outgrowth of the recent unanimous Supreme Court decision in Sackett v. EPA?

In addition to ordering replacement water supplies to the recipients of water from the affected water well, the AO included the requirements that Range study a twenty-county aquifer, identify gas flow pathways anywhere within that aquifer regardless of their source, and prepare a plan to eliminate those flows and remediate any area of the aquifer that has been impacted by gas from any source.  Range was to identify and sample all private water wells within 3,000 feet of their two suspect gas wells, as well as all the water wells serving a subdivision in Parker County.  Range informed EPA that it disputed the validity of the AO and would not comply with some of its terms.

In addition to Range’s challenge to the AO, the Railroad Commission Texas, the state agency with sole jurisdiction and responsibility for the control and disposition of waste and the abatement and prevention of pollution of surface and subsurface water resulting from oil and gas activities, called a hearing to consider whether Range’s operations caused or contributed to the contamination of the water wells in question.  Based on the evidence presented at the hearing, conducted on January 19-20, 2011, the Railroad Commission found that the contamination of the water wells came from the shallower Strawn gas field, which begins about 200 to 400 feet below the surface.  Geochemical gas testing demonstrated that the natural gas seeping into the water wells did not match the gas produced by Range from the much deeper Barnett Shale field, which is more than 5.000 feet below the surface in that area of Parker County.  The evidence showed that hydraulic fracturing of gas wells in the area could not result in communication between the Barnett Shale gas field and the shallow aquifers from which water wells in the area produce.  EPA chose not to participate in the state hearing process.

EPA brought a civil enforcement action in the Northern District of Texas against Range on January 18, 2011, Case No. 3:11-cv-00116-F, seeking injunctive relief and civil penalties for Range’s failure to comply with the AO.  Range filed a petition for review on the AO with the 5th Circuit on January 20, 2011, Case No. 11-60040, challenging the AO and the constitutionality of the AO statutory scheme as interpreted and applied by EPA.

The district court in its Order Denying Without Prejudice Defendants’ Motion to Dismiss and Staying Case, 2011 WL 2469731 (N.D.Tex.), struggled with EPA’s claim that it only has to prove noncompliance with the AO and the Court has no jurisdiction to review the factual and legal basis of the AO. The Court found that the AO was a final agency action, but stayed the case pending the 5th Circuit decision.

The issues before the 5th Circuit included whether the AO was final agency action and, if so, has Range been provided due process. Oral argument was considered on October 3, 2011.

On March 21, 2012, a unanimous Supreme Court held in the Sackett case that AOs issued under the Clean Water Act constitute final agency action. Under the Administrative Procedure Act, Respondents, like Chantell and Michael Sackett, are afforded pre-enforcement review of the factual and legal basis of the AO and may bring a civil action under the APA to challenge the AO.

Given the opinion for a unanimous Supreme Court in the Sackett case, EPA must have felt less than enthusiastic about its prospects in the pending Range cases. On Friday afternoon, March 30 with no fanfare and limited media attention, EPA announced the withdrawal of the Range AO. In a letter to EPA on the same date, Range confirmed the withdrawal of the AO and a related joint stipulation to dismiss EPA’s enforcement action and committed to sample twenty private water wells located in southern Parker County on a quarterly basis for one year, a substantial reduction in the scope and magnitude of the terms in the AO.

EPA’s hasty dismissal of the Range case raises some interesting questions. Did EPA agree to withdraw the Range AO in order to minimize the litigation risk of establishing pre-enforcement review rights of respondents to unilateral AOs under the Safe Drinking Water Act?  How extensive will the Sackett case be applied to unilateral AOs authorized under other non-Clean Water Act statutes administered by EPA and other federal agencies? What are the implications to EPA’s ability to react quickly to bonified public health emergencies? Will Congress need to overhaul statutory AO provisions to avoid the problem confronted in Sackett?

The Process Continues: Savannah Harbor Expansion Project (SHEP)

Posted on August 1, 2011 by Drew Ernst

The deepening of the Savannah Harbor, now estimated to cost $588 million, was conditionally approved in part when Congress passed the Water Resources Development Act of 1999 (“WRDA99”). Those conditions included finalizing an environmental impact statement for the project as well as other supporting studies and completion of the permitting process. The act also required the selected plan for this project, which is known as SHEP, to be jointly approved by the Secretary of Interior, the Secretary of Commerce, the Administrator of the Environmental Protection Agency, and the Secretary of the Army, pursuant to § 101(b)(9)(B(ii) of WRDA99.

On April 15, 2010, I posted a blog entitled “In Search of Mitigation” on the ACOEL website (see Archives) which outlined the history and need for SHEP, as well as various proposals for mitigating the project’s adverse environmental impacts. A Draft Tier II EIS and Draft General Re-Evaluation Report for SHEP were released in November 2010. The public comment period closed in January of 2011 and the Corps of Engineers has been analyzing comments and undertaking additional studies.

Because of the unique language in WRDA99, EPA, U.S. Fish and Wildlife and NOAA individually have a “kill switch” (a term coined by Savannahians) on key issues regarding SHEP. Fish and Wildlife is concerned that the proposed five years of post-construction monitoring is not adequate, and that ten years of monitoring should be required to ensure that proposed mitigation procedures are working. As discussed in my earlier posting, SHEP incorporates an Adaptive Management Plan (“AMP”) which in itself is somewhat unique. The AMP, one of the first ever implemented for a harbor project, is designed to evaluate whether the measures undertaken to mitigate adverse impacts are performing as predicted and provide for changes to those mitigation measures if needed. And it's worth noting that those mitigation measures represent a very substantial share of the total project costs - 41.6 percent according to a March 2011 update from the Corps.

Of great concern to Fish and Wildlife is preservation of areas of tidal freshwater marsh found in the Savannah National Wildlife Refuge adjacent to the Savannah harbor. Fish and Wildlife also wants a guaranty that the money will be readily available to implement the AMP if mitigation measures need to be modified during post-construction monitoring. Mitigation efforts will include acquisition of freshwater wetlands across from and upriver of the Savannah National Wildlife Refuge (approximately 2,680 acres of wetland preservation) to replace freshwater acres which will be lost in part to increased salinity as a result of future rising tides, whether or not SHEP is implemented.

NOAA also remains concerned about SHEP’s impacts, particularly on the endangered shortnose sturgeon. Many of NOAA’s concerns could be alleviated if an out of service lock and dam system located upriver in Augusta, Georgia, were removed. However, such action would not be popular with residents in and about Augusta who use the impoundment for recreational purposes. EPA, in turn has requested a better explanation from the Corps of the impacts of harbor deepening on future harbor growth and on increases in air pollution and other collateral impacts.

Watching every move the agencies make is the Southern Environmental Law Center (“SELC”) and the Coastal Conservation League. Both have threatened to sue if their environmental concerns are not resolved. SELC advocates a systematic by the Corps that would include consideration of all ports located on the Eastern Seaboard as “alternative sites” in order to determine which port best warrants deepening after considering environmental impacts and construction costs at each location.

Another player to watch is South Carolina, which shares the Savannah River as a common boundary with Georgia. South Carolina appears to be doing everything it can to stop or slow down SHEP in an effort to protect the competitiveness of the Port of Charleston.

Given the size of SHEP and its potential impacts, we can expect that other parties may join the action, and I in turn expect to be reporting again on SHEP as the project progresses into its second decade.


Maryland Issues Notice of Intent to Sue for Pennsylvania Fracking Fluid Release

Posted on July 26, 2011 by Chester Babst

The increasingly controversial issues surrounding the extraction of natural gas by “fracking” took an unusual turn on May 2, 2011 when the Attorney General for the State of Maryland notified Chesapeake Energy Corporation and its affiliates of the State’s intent to sue for violations of the Clean Water Act (“CWA”) and the Resource Conservation and Recovery Act (“RCRA”). The notice letter followed from the alleged release of “thousands of gallons” of hydraulic fracturing fluids (“frack fluids”) from the failure of a natural gas well located in Bradford County, Pennsylvania on April 19, 2011. The frack fluids reportedly entered Towanda Creek, a tributary of the Susquehanna River, which eventually flows into Maryland and empties into the Chesapeake Bay. According to the May 2, 2011 press release from the Attorney General’s office, “at the close of the required 90-day notice period, the State intends to file a citizen suit and seek injunctive relief and civil penalties under RCRA for solid or hazardous waste contamination of soils and ground waters, and the surface waters and sediments of Towanda Creek and the Susquehanna River. The State also intends to seek injunctive relief and civil penalties under the CWA for violation of the CWA's prohibition on unpermitted pollution to waters of the United States.” The press release noted that “the Susquehanna River supplies drinking water for approximately 6.2 million people and sensitive fish populations like the American shad and striped bass are moving into the Susquehanna flats at this time of year. Exposure to toxic and carcinogenic chemicals in unknown quantities creates a risk of imminent and substantial endangerment to humans using Pennsylvania and Maryland waterways for recreation and to the environment.”

The notice of intent to sue is another example of the increased scrutiny directed toward hydraulic fracturing activities associated with the Marcellus Shale, an enormous geological formation underlying much of Pennsylvania and portions of West Virginia, Ohio and New York. Hydraulic fracturing refers to the process by which water, sand and a limited amount of chemicals are injected into a rock formation to fracture it, allowing the natural gas to be released and extracted. Much attention has been directed toward the chemicals used during the fracking process. U.S. EPA recently issued its plan to study the effects of fracking, with the initial report due in 2012 and the final report due in 2014. It also issued information requests earlier this month to six large natural gas producers in Pennsylvania, asking for information regarding how wastewater will be recycled or disposed. In addition, plaintiffs’ lawyers and citizens have begun filing toxic tort claims for alleged property damages and personal injuries caused by fracking, and Marcellus Shale activities in general.

Bradford County is located in north central Pennsylvania and borders New York State. The prospect of a suit by Maryland for a release in Pennsylvania at a significant remove from Maryland raises many novel issues, not the least of which is the question of standing.

Supreme Court to Give Unilateral Administrative Orders a Constitutional Checkup

Posted on July 22, 2011 by Donald Fowler

Yesterday, Ted Garrett posted a blog on the Supreme Court’s grant of certiorari in Sackett v. EPA, 2011 WL 675769 (No. 10-162, June 28, 2011) which involves appeal of an EPA enforcement order under the Clean Water Act (CWA). His blog notes that the Court declined to review a similar appeal brought by GE under CERCLA. In an earlier blog post I summarized that GE petition which posed the following questions with respect to CERCLA’s unilateral administrative order (UAO) provisions:

  1. Does a UAO’s imposition of either significant response costs or significant decreases in a PRP’s stock price and credit rating constitute a deprivation of property under the Due Process Clause?
  2. Does CERCLA’s UAO scheme impermissibly coerce compliance in violation of the Due Process Clause by conditioning any judicial review of a UAO upon the threat of treble damages and fines that accumulate at EPA’s sole discretion?

Given the Supreme Court’s denial of the GE petition on June 6, 2011, it is somewhat surprising that the Court granted certiorari on June 28 in the Sackett appeal where the issues to be considered are:

  1. May Petitioners seek pre-enforcement judicial review of the administrative compliance order pursuant to the Administrative Procedure Act, 5 U.S.C. §704?
  2. If not, does Petitioners’ inability to seek pre-enforcement judicial review of the administrative compliance order violate their rights under the due process clause?


Sackett v. EPA, S. Ct. No. 10-1062. In fact, that second question, which was drafted by the Court itself and not by the Sackett petitioners, is uncannily similar to the second issue raised in the GE petition. What’s going on here?

The facts in Sackett are these. Mr. and Mrs. Sackett bought a small parcel of property – roughly ½ acre – near Priest Lake, Idaho for the purpose of building a house. Although the lots on either side were undeveloped, the lots between the Sacketts’ property and the lake were developed with permanent structures, and the entire area was a built out area zoned for residential use, with sewer hookups and local building permits. The Sacketts began earth moving work with permits in hand, only to receive an order from EPA pursuant to the CWA telling them that they had illegally filled jurisdictional wetlands and that they were required not only to cease further filling but to remove the prior fill and replant the area with indigenous wetland plants. The effect of the order was to preclude any development of the Sacketts’ property.

Upon receiving the order, Mr. and Mrs. Sackett asked EPA to conduct an administrative hearing to contest whether their property in fact contained wetlands within EPA’s jurisdiction. When EPA ignored their request, the Sacketts sued EPA, challenging EPA’s exercise of jurisdiction. EPA moved to dismiss, arguing that pre-enforcement review of compliance orders is precluded by the CWA. In response, the Sackett’s argued that they were entitled to seek review of EPA’s exercise of jurisdiction under the Administrative Procedure Act (“APA”). The district court agreed with EPA, reasoning that pre-enforcement review of administrative compliance orders is barred by the Clean Water Act’s statutory scheme and that preclusion of pre-enforcement review did not violate the Sacketts’ due process rights.

On appeal, the Ninth Circuit affirmed. It held, first, that review under the APA is not available where the relevant statute precludes judicial review, and – though the CWA does not expressly preclude review of administrative compliance orders – it found a clear intent to preclude such review in the statutory scheme. In so holding, the Ninth Circuit joined the ranks of the four other circuit courts that have considered the question, as well as the majority of district courts that have ruled on the issue.

The court then considered and rejected the Sacketts’ due process argument. The Sacketts had argued that, absent pre-enforcement judicial review, their only avenue to judicial review was to defy the order and await an EPA enforcement action. That course of action, however, carries with it the risk of large daily civil penalties (up to $37,500 per day) and potential criminal sanctions as well – in short, penalties so onerous as to foreclose access to the courts as a practical matter in violation of Ex Parte Young, 209 U.S. 123 (1908), and its progeny. The Ninth Circuit nonetheless found the consequences of noncompliance with a CWA order were not so onerous as to create a constitutionally intolerable choice for two reasons:


  • First, the court concluded that the Sacketts could avoid potential penalties by applying for a permit to fill their property and then immediately appeal the agency’s permit denial to district court. Setting aside the oddity of a proceeding to contest a permit denial where the primary argument is that the agency lacked jurisdiction to issue the permit in the first place, the Court’s conclusion ignores two important practical realities – (1) EPA and the Corps of Engineers typically will not act on a permit application while a compliance order is outstanding, and (2) as the Supreme Court observed in Rapanos v. U.S., 547 U.S. 715,721 (2006), the permit application process typically takes years to conclude and costs the applicant hundreds of thousands of dollars, none of which is likely to be reimbursable even if the applicant later prevails on its jurisdictional challenge.
  • Second, the court noted that the award of civil penalties is ultimately committed to judicial, not agency, discretion and that a court must take into account a wide range of equitable factors in determining the amount of the penalty. Thus, the Ninth Circuit reasoned, the Sacketts can refuse to comply and have their day in court before any penalties are assessed. However, absent some guarantee that no penalty will be assessed where an order recipient has presented a substantial, good faith, albeit unsuccessful, challenge to the order, the fact that it will be a court, rather than EPA, that considers whether to assess potentially ruinous civil penalties offers scant comfort to folks in the Sacketts’ position.

Against this backdrop, the Supreme Court granted certiorari. There had been some indication in recent decisions that the Court was interested in revisiting Ex Parte Young, which has received scant attention in many decades. See, e.g., Free Enterprise Fund v. Public Accounting Oversight Board, 130 S. Ct. 3138, 3151 (2010) (“[w]e normally do not require plaintiffs to ‘bet the farm by taking the violative action’ before ‘testing the validity of the law,’” citing Ex Parte Young). But why this case and not GE’s challenge to CERCLA’s UAO provisions? Two differences between the CWA and CERCLA may provide an explanation. First, section 106(b)(1) of CERCLA permits imposition of penalties for violations of a UAO only where the violation (or failure to comply) is willful and “without sufficient cause.” The CWA contains no similar “defense”, which the government argued in the GE case was a constitutionally significant escape clause under Ex Parte Young. Second, Section 106(b)(2) of CERCLA gives a UAO recipient who chooses to comply with an unlawful order the opportunity to seek reimbursement of its costs of compliance, at least in certain circumstances. Again, the CWA contains no such provision, and again the government argued in the GE case that the reimbursement provision had constitutional significance. Whether or not those differences do, indeed, rise to constitutional significance, it is true that they would have made the constitutional analysis in the GE case more complicated than in Sackett.

Of course, the Court may well avoid the due process issue in Sackett by ruling that the CWA does not preclude pre-enforcement review. Should it reach the due process issue and decide in favor of petitioners, however, its opinion will bear close examination, as it may have significant implications for recipients of administrative compliance orders under CERCLA, the Clean Air Act, and many other statutes.

Watch this space.

Supreme Court to Review Lawfulness of EPA Enforcement Orders

Posted on July 21, 2011 by Theodore Garrett

The U.S. Supreme Court will hear a lawsuit challenging the constitutionality of EPA compliance orders under the Clean Water Act. Sackett v. EPA, 2011 WL 675769 (No. 10-162, June 28, 2011). The petition for a writ of certiorari was granted to consider: “(1) whether petitioners may seek pre-enforcement judicial review of the order pursuant and (2) if not, does the unavailability of such review violate petitioners’ rights under the Due Process Clause?” Because of EPA’s broad authority to issue orders under the Clean Water Act and other statutes, the Sackett case will be of broad interest to environmental lawyers.

The facts are as follows. The Sacketts graded a lot in a residential subdivision in order to build a home. Thereafter, EPA issued an order to the Sacketts claiming that they violated the Clean Water Act by filling a wetland without a permit. The order directed the Sacketts to remove the fill, replace lost vegetation, and monitor the site for three years. The Sacketts did not agree that their property was a wetland and asked EPA for a hearing, which EPA allegedly ignored. The Sacketts then filed suit demanding an opportunity to contest the basis for the compliance order, which was dismissed by the district court. The Ninth Circuit affirmed the dismissal on appeal, holding that the Clean Water Act precludes review of pre-enforcement actions, such as compliance orders. The Ninth Circuit rejected the Sackett’s due process argument, noting that the Sacketts can raise their defenses if and when EPA seeks to enforce the compliance order in federal court.

The Sackett’s petition for certiorari argues that the Ninth Circuit’s decision leaves property owners like the Sacketts in an impossible situation: “either go through with the permit process that you believe is completely unnecessary and spend more money than your property is worth to "purchase" your chance at your day in court; or invite an enforcement action by EPA that may give you your day in court but only at the price of ruinous civil penalties and, depending on EPA's ire, criminal sanctions for underlying violations of the CWA.”

The Sackett case raises significant issues applicable to the Clean Water Act that may have implications for other environmental statutes such as the Clean Air Act under which EPA may issue enforcement orders and that do not expressly bar pre-enforcement review.

General Electric unsuccessfully challenged EPA’s use of enforcement orders issued under CERCLA. Although the Supreme Court declined to review the GE case, CERCLA practitioners will be interested to see if the Court’s opinion has implications for EPA Superfund orders. Stay tuned.

Permit as Shield Against Environmental Claims Under State Tort Law - At Least in the Fourth Circuit

Posted on July 20, 2011 by Allan Gates

In the 1980s a group of Vermont landowners challenged the legality of a New York paper mill’s wastewater discharges into Lake Champlain. The Vermonters argued that the paper mill’s discharges in New York constituted a nuisance because of the injuries they caused in Vermont. They sought monetary damages and injunctive relief under Vermont tort law. The paper company argued that the discharges from its mill were authorized by its NPDES permit, and the company contended that the Clean Water Act preempted state tort claims of this sort – at least when the tort claims challenged conduct authorized by a permit issued pursuant to the Act. The U.S. Supreme Court sided with the Vermont landowners, but with a twist. The Court held that the Clean Water Act preempted tort claims based on Vermont law against a source permitted in New York, but it did not preempt tort claims based on New York law, the law of the state where the source was permitted. The Court rejected the notion that the paper mill’s permit was a complete shield against all state law tort claims. The Court reasoned that the savings provision of the Clean Water Act left New York free to impose legal restrictions under state law –including state tort law— that were more stringent than the requirements of the Clean Water Act. International Paper Co. v. Ouellette, 479 U.S. 481 (1987).

For more than twenty years following the Supreme Court’s decision in Ouellette, the law on this question seemed well-settled: federal environmental statutes do not preempt the state tort law of the “source” state; and permits issued under federal environmental programs do not provide a shield against tort claims based on the law of the source state. The recent decisions in the Second Circuit and the Supreme Court in American Electric Power v. Connecticut did not disturb this view of the law because the tort claims in AEP were based on federal common law, not state law of the source state.

A recent decision in the Fourth Circuit has turned the seemingly well-settled view of the law on its head. The Fourth Circuit’s decision arose out of a suit by the State of North Carolina against TVA. North Carolina claimed that NOx and SOx emissions from TVA coal-fired electric generating stations located in Tennessee and Alabama were causing health problems and other environmental damage in North Carolina. The state alleged that TVA’s emissions constituted a public nuisance under the tort law of the states where the facilities were located; and North Carolina sought injunctive relief requiring the prompt installation of more advanced emissions controls than required by the facilities’ air permits. The district court ultimately found TVA liable and ordered injunctive relief with respect to the four TVA facilities closest to North Carolina. In a remarkably strident decision, the Fourth Circuit reversed the district court and remanded with instructions to dismiss the case. North Carolina v. TVA, 615 F.3d 291 (4th Cir. 2010).

The Fourth Circuit’s opinion examined at length the regulatory structure created by the Clean Air Act and concluded that Congress intended to preempt state tort law claims of the sort asserted by North Carolina, even when those claims were based on tort law of the source state. In so holding, the Fourth Circuit made no attempt to distinguish Ouellette. Nor did it suggest that the Clean Air Act differed in any material respect on this point from the statute involved in Ouellette, the Clean Water Act. Indeed, the Fourth Circuit repeatedly cited those portions of the majority opinion in Ouellette which found that Vermont law was preempted, but the Fourth Circuit largely ignored the portion of Ouellette which held New York tort law to be intact and available.

The Fourth Circuit also concluded, ostensibly as an independent ground for its decision, that the district court erroneously applied North Carolina law rather than the law of the source states. One cannot help but question the strength of the court’s conviction in this conclusion, however, because the proper remedy for application of the wrong state’s law would be to remand the matter for further consideration based on the correct state law, not to direct dismissal of the action as ordered by the Fourth Circuit.

The Fourth Circuit also found that even if the district court did apply the correct state law, it reached the wrong conclusion. According to the Fourth Circuit, it was inconceivable that the source states would have concluded that the TVA facilities in question constituted a nuisance since those states had issued permits allowing TVA to operate in the manner challenged by North Carolina. The Fourth Circuit’s opinion on this point relied on Alabama and Tennessee cases which held that conduct expressly authorized by law would not constitute a nuisance; but the Fourth Circuit did not address the savings clauses in the Alabama and Tennessee environmental statutes, nor did it discuss decisions in those states which held that environmental permits did not block nuisance claims under their respective state’s laws.

North Carolina filed a petition for certiorari. Amici briefs in support of the petition were filed by the American Lung Association, the American Thoracic Society, Defenders of Wildlife, National Parks Association, Parks Conservation Association, Natural Resources Defense Council, Sierra Club, a group of environmental and administrative law professors, and the states of Maryland, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, and Vermont. Among other things, the petition argued that the Fourth Circuit’s decision was contrary to Ouellette and conflicted with decisions in the Second and Sixth Circuits. Not surprisingly, North Carolina’s cert. petition attracted significant attention from those who follow the Supreme Court docket. In the end, however, the Supreme Court will never have a chance to act on North Carolina’s petition for certiorari. After repeated extensions of the time for it to respond to the cert petition, TVA entered into a settlement with North Carolina and other parties that resolved the merits of North Carolina’s claims. As part of the settlement, North Carolina agreed to withdraw its petition for certiorari.

The net result for Ouellette is that the Fourth Circuit’s opinion North Carolina v. TVA is left standing as a significant obstacle to any environmental tort claim that challenges activities authorized by an environmental permit, even if the tort claim is based on the law of the source state. Stated differently, environmental permits may now serve as shields against all tort claims, including claims based on the law of the source state, despite the presence of any savings provisions in the state and federal environmental statutes in question.

As a minor footnote, the Fourth Circuit’s revisionist treatment of Ouellette is particularly ironic because the author of the Fourth Circuit opinion, Judge J. Harvie Wilkinson, once served as a law clerk to Justice Lewis Powell, the author of the majority opinion in Ouellette, and even wrote a flattering memoir of his clerkship entitled Serving Justice.

New Flow Control Decision in New York Examines Constitutionality of Ordinance

Posted on June 28, 2011 by Karen Aldridge Crawford

The United States District Court for the Northern District of New York recently took at least a small bite out of the legacy established by the 2007 U. S. Supreme Court decision in United Haulers Association v. United Herkimer Solid Waste Management Authority which first allowed flow control by a county under the unique circumstances set forth in that case.

Emboldened by the 2007 decision, several counties in various states have enacted flow control ordinances that require solid waste to be disposed only at county owned facilities. Not surprisingly, private waste management companies have systematically challenged those laws. In JWJ Industries, Inc. and Jeffrey Holbrook v. Oswego County, 5:09-CV-0740 (NPM/DEP) (N.D.N.Y. June 13, 2011), the district court addressed the narrow question of whether the flow control ordinance adoped by Oswego County was unconstitutionally vague and overbroad, both on its face and as applied. As an initial matter, the court, citing to United Haulers, noted that "the County was unquestionably within its right to implement a flow control ordinance directly affecting the operation of [Plaintiffs' facility]." However, after subjecting the ordinance to the two-pronged analysis set forth in Thibodeau v. Portuondo, 486 F. 3rd 61 (2d Cir. 2007), the court determined that the ordinance was unconstitutionally vague.

The Second Circuit in Thibodeau set forth two independent grounds recognized by the U.S. Supreme Court to determine whether a law is so vague as to deny due process of law:


  1. Fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct the law prohibits.
  2. Authorizes or even encourages arbitrary and discriminatory enforcement.

Applying this two-pronged analysis, the court in JWJ Industries determined that the ordinance at issue failed both prongs. As to the first prong, the court found specifically that portions of the ordinance were contradictory and could be read to both require and prohibit the same exact actions, while also prohibiting inaction. As to the second prong, the court determined that the ordinance failed to take JWJ’s status or prior existence into account, providing no explicit standards on how it would treat existing private transfer facilities or processing facilities within the county; that scrutiny of letters and directives from the County and its director of solid wastes revealed that the flow control ordinance in question authorized and encouraged arbitrary and discriminatory enforcement; and that such arbitrary enforcement was manifest. Accordingly, the Court granted Plaintiffs' motion for judgment on the pleadings, set aside the ordinance as unconstitutionally vague and otherwise dismissed the case.

Of note, the court also admonished the county, stating that, if the county government was basing its ordinance on a template obtained from elsewhere or was adopting an ordinance from another municipality (which often is done), it needed to at least try to conform the law to the conditions in that specific county.

Oregon Poised to Adopt Nation's Strictest Water Quality Standards for Toxic Chemicals

Posted on June 10, 2011 by Rick Glick

By: Rick Glick and Michael Gelardi

On June 14, the Oregon Environmental Quality Commission is likely to adopt stringent new water quality standards for toxics. After years of planning and debate, the Oregon Environmental Quality Commission (EQC) next week will likely adopt a proposal by the Department of Environmental Quality (DEQ) to tighten human health-based water quality criteria for a broad range of toxic pollutants. The proposed rules are driven by a fish consumption rate that is ten times higher than assumed in previous rules.

Once adopted by the EQC and approved by the EPA, the new rules will result in stricter limits on water discharge permits and new programs to control agricultural and forestry runoff. The proposed rules are controversial and set Oregon apart as having the strictest water quality standards in the country. For more information, please click here.

Guidance on Clean Water Act Jurisdiction

Posted on May 23, 2011 by Kenneth J. Warren

Observance of International Migratory Bird Day on May 14 marks a good time to examine the latest efforts to define the limits of Clean Water Act jurisdiction over wetlands and other waters. Recall that in the SWANCC case in 2001, the Supreme Court held that the presence of migratory birds did not serve as a sufficient basis for applying Clean Water Act protections to isolated, intrastate wetlands. Since SWANCC, courts and agencies have struggled to define the limits of federal jurisdiction.

On May 2, 2011, EPA and the Army Corps published draft guidance (“Guidance”) in the Federal Register. This Guidance may be a trial balloon that will inform a final guidance document and ultimately duly adopted regulations. Whether there will be challenges to the substantive provisions of the Guidance or the procedure of issuing guidance in advance of formal rulemaking remains to be seen.

Initially, the Guidance is solidly grounded in the language of the Act and the Supreme Court’s 1985 ruling in Riverside Bayview Homes. The Act, the Guidance notes, is applicable to navigable waters which are defined as waters of the United States and the territorial seas. Traditional navigable waters are susceptible to use in commerce and form the core of jurisdictional waters. Navigable waters are not, however, limited to waters that are navigable in fact. The Guidance reflects Riverside Bayview Homes’ holding that wetlands abutting traditional waters are also subject to regulation under the Act.

How far the Act’s jurisdiction extends beyond abutting wetlands remains highly controversial. The Guidance eschews any attempt to define jurisdictional boundaries through a single science-based theory. Instead, the Guidance looks to the Supreme Court’s 2006 splintered decision in Rapanos and adopts alternative standards based on the plurality opinion’s “continuous surface connection” test and Justice Kennedy’s concurring opinion’s “significant nexus” test. If either test is satisfied, jurisdiction attaches.

In keeping with the Rapanos plurality, the Guidance includes as “waters of the United States” those wetlands, non-navigable tributaries and other waters which have a continuous surface connection to jurisdictional waters at least on a seasonal basis. In this respect, the Guidance requires an evaluation of the length and timing of seasonable flow in the watershed or other “eco-region” in question. The Guidance appears to justify use of this test on the ground that its results would be upheld by a majority of the Justices on the Court, albeit for varying reasons.

The Guidance also asserts jurisdiction based on Justice Kennedy’s concurring opinion in Rapanos. Justice Kennedy concluded that the Act regulates waters with a significant nexus to traditional navigable waters. A nexus exists if the waters either alone or in combination with similarly situated waters in the region significantly affect the chemical, physical or biological integrity of traditional navigable waters.

There is much to be said in favor of the significant nexus test. It focuses on the goals of the Act to restore and maintain water quality and allows scientific judgments to inform the Act’s reach. Wetlands and other waters that themselves are not navigable may provide ecological services that benefit navigable or interstate waters. For example, ponds or other features may retain stormwater and thereby protect traditional navigable waters from flooding or pollution. Viewing all such wetlands or other features within a watershed in a comprehensive manner is consistent with modern water management and protective of water resources.

Nevertheless, applying the test leaves much room to debate the significance of the connection between the wetlands, non-navigable tributaries or other waters to be evaluated and the nearest navigable water in specific instances. Despite the Guidance’s goal of clarity, distinguishing a significant reduction of stormwater runoff or pollutant discharge from an insignificant reduction is necessarily subject to considerable uncertainty.

Perhaps the most controversial aspect of the Guidance is its suggestion that where a significant nexus with a wetland exists, all other wetlands within the same watershed may be deemed similarly situated and thereby covered by the Act. Likewise jurisdiction over a single non-navigable tributary may lead to jurisdiction over all non-navigable tributaries in the watershed. This potential blanket classification if applied to waters that do not provide a meaningful contribution to water quality goals is expansive and may leave very few waters unregulated. The implementing agencies are likely to be judicially challenged if they rely on jurisdiction over one wetland or tributary as the basis for asserting jurisdiction over a different wetland or tributary in the same watershed. Given the past willingness of courts to enter the fray even where the Corps has gone through a full rulemaking process, the agencies are not likely to have the final word.

CWA § 404 - To Assume or Not To Assume ...

Posted on May 13, 2011 by David Van Slyke


Yet another state is embarking on the long and arduous road towards assuming regulatory control of the Clean Water Act § 404 wetlands protection program from the US Army Corps of Engineers. As part of newly-elected Republican Governor Paul Page’s overall regulatory reform initiative, the Maine Department of Environmental Protection is planning to seek authority (pursuant to 33 U.S.C. §§ 1344(g) and (h)) to implement the dredge and fill program in lieu of the Army Corps. In the 34 years since the mechanism for states to assume the so-called “404 program” of federal wetlands permitting was created in 1977, many other states have considered it, but only two, Michigan and New Jersey, have completed the process.

State assumption allows a state to regulate wetlands and waterbodies and to issue, condition or deny permits for work in those natural resources. At first blush, state takeover would seem like low-hanging fruit in states’ efforts to eliminate multiple regulatory review layers. However, a 2008 EPA study found that although numerous states have evaluated assumption -- and several have moved significantly down the path -- most abandoned the effort for a number of reasons:


  • Resources: Lack of state funding to implement the program and unavailability of Federal implementation grants (unlike the 402 program);
  • Statutory Changes: State laws had to be enacted or amended, and the political will necessary to make such changes often fades in light of environmental NGO opposition;
  • Corps Involvement: Rivers & Harbors Act §10 permitting authority remains with the Corps, thus not eliminating redundancy in ecosystems involving both wetlands and navigable/tidal waterways;
  • EPA Involvement: EPA regulations still require EPA review of permits issued by a state even under an assumed program when those permits involve, among other things, potential impacts to ESA threatened or endangered species, NHPA protected properties, waters of another state, and discharges to “critical areas” (e.g., state/federal parks, wilderness areas, refuges, etc.).
  • Federal Agency Authorization Disputes: At least until recently, there was uncertainty as to whether an ESA §7 consultation requirement (with USFWS and NMFS) had to be met before EPA could grant approval of a state’s application to assume the 404 program. A December 27, 2010 letter from EPA’s Assistant Administrator for Water indicates that EPA has won that tug of war -- no ESA §7 consultation is required.

Also impacting states’ decisions regarding assumption of the 404 program is the continuing uncertainty surrounding the scope of the Corps’ jurisdiction following the Supreme Court’s decisions in SWANCC and Rapanos. EPA and the Corps have attempted to address this issue in various guidance documents. See e.g., “Joint Memorandum” (January 15, 2003)(68 Fed. Reg. 1991) and “Clean Water Act Jurisdiction Following the U.S. Supreme Court’s Decision in Rapanos v. United States & Carabell v. United States” (12/2/08).

An April 2011 joint Corps/EPA proposed superseding guidance, notes that “Corps Districts will utilize this guidance to implement Clean Water Act section 404, 33 U.S.C. 1344.” While there is no mention in the guidance of its applicability to state-assumed programs, it is likely that EPA (and the Corps) will require that such guidance, once finalized, be adhered to in any EPA-approved state assumption of the CWA 404 program. Given recent reports  that the April 2011 proposed guidance will dramatically expand the scope of federal jurisdiction over wetlands and waterbodies, states will undoubtedly continue to struggle to identify the benefits in assuming the CWA 404 program.

David B. Van Slyke
Preti Flaherty
One City Center
Portland, Maine 04112-9546

Can We Comment Yet? EPA and Corps Issue Proposed New Rapanos Guidance

Posted on May 2, 2011 by Robert Lawrence

I previously posted that EPA and the Army Corps of Engineers’ December 2010 draft guidance document describing how EPA and the Army Corps of Engineers intend to identify jurisdictional waters under the Clean Water Act (CWA) and implement the U.S. Supreme Court’s decisions in Rapanos and SWANCC had been leaked to the public. EPA's Draft CWA Jurisdiction Guidance Is Leaked At Last.Today, at last, EPA and the Corps have published in the Federal Register their proposed “EPA and Army Corps of Engineers Guidance Regarding Identification of Waters Protected by the Clean Water Act” (the “Proposed Guidance”). EPA and the Corps will accept public comment on the Proposed Guidance until July 1, 2011. The Agencies state that rulemaking will follow issuance of the final Guidance. 

Once finalized, the Proposed Guidance will supersede EPA’s and the Corps’ “Joint Memorandum,” providing clarifying guidance on SWANCC, dated January 15, 2003 (68 Fed. Reg. 1991, 1995), and “Clean Water Act Jurisdiction Following the U.S. Supreme Court’s Decision in Rapanos v. United States & Carabell v. United States,” dated December 2, 2008 (the “Rapanos Guidance”).  Until the Proposed Guidance is final, both the 2003 Joint Memorandum and the Rapanos Guidance remain in effect.


The Proposed Guidance is more measured in tone than the December 2010 leaked Draft. For example, the Proposed Guidance eliminates the dig at the Bush administration’s earlier Rapanos Guidance as reflecting “a policy choice to interpret Justice Kennedy’s opinion narrowly, resulting in fewer waterbodies found to be jurisdictional under the CWA than under a more faithful interpretation.” And the Proposed Guidance no longer acknowledges that it will “increase significantly” the number of waters which are subject to Clean Water Act jurisdiction. (Instead, the Proposed Guidance carefully explains that, “The agencies expect, based on relevant science and recent field experience, that under the understandings stated in this draft guidance, the extent of waters over which the agencies assert jurisdiction under the CWA will increase compared to the extent of waters over which jurisdiction has been asserted under existing guidance, though certainly not to the full extent that it was typically asserted prior to the Supreme Court decisions in SWANCC and Rapanos.”) Despite this revised language, the fact remains that the Proposed Guidance will significantly expand the scope of waters subject to Clean Water Act jurisdiction for all waters subject to any of the programs authorized under the CWA.

In an April 14, 2011 letter to EPA Administrator Lisa Jackson and the Assistant Secretary for the Army, Jo‑Ellen Darcy, a bipartisan group of 170 members of Congress urged EPA and the Corps to scrap the Draft Guidance and to proceed with formal rulemaking:

The Agencies cannot, through guidance, change the scope and meaning of the Clean Water Act or the statute’s implementing regulations. If the Administration seeks statutory changes to the Clean Water Act, a proposal must be submitted to Congress for legislative action. If the Administration seeks to make regulatory changes, a notice and comment rulemaking is required.

EPA and the Corps appear to have responded to this Congressional pressure and the input of stakeholders by taking a mixed guidance/rulemaking approach. The Proposed Guidance states:

After receiving and taking account of public comments on this document, EPA and the Corps expect to finalize it and to undertake rulemaking consistent with the Administrative Procedure Act.  This process is expected to start with a proposed rule, to clarify further via regulation the extent of Clean Water Act jurisdiction, consistent with the Court’s decisions.  EPA and the Corps decided to begin this process with draft, nonbinding guidance in order to clarify their existing understandings while also considering and receiving the benefit of public comments.

It remains unclear whether all or portions of the Proposed Guidance actually will be subject to rulemaking under the APA. For example, one of the more controversial aspects of the Proposed Guidance deals with the extent to which “other waters” [or “(a)(3) waters”] are subject to Clean Water Act jurisdiction. “Other waters” are “waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce.” 33 C.F.R. § 328.3(a)(3). Under the Proposed Guidance, these other waters are subject to Clean Water Act jurisdiction if a fact specific analysis determines they have a significant nexus to a traditional navigable water or interstate water. The Guidance divides these other waters into two categories – those that are physically proximate to other jurisdictional waters and those that are not – and discusses how each category should be evaluated.The Proposed Guidance states expressly that these other waters will be subject to rulemaking:

The agencies expect to further clarify the scope of waters subject to CWA jurisdiction, including jurisdiction over (a)(3) waters after SWANCC and Rapanos, as part of a notice and comment rulemaking.

As part of this rulemaking process, the Agencies will consider how a significant nexus analysis should be conducted for non-physically proximate other waters. The only other issue that the Guidance specifically says will be addressed in the upcoming rulemaking is whether the existence of an ordinary high-water mark alone is sufficient to establish a significant nexus to downstream traditional navigable or interstate waters, without requiring a site-specific analysis.

Given the substantial increase in waters that will become subject to Clean Water Act jurisdiction under the Proposed Guidance, and the resultant impact upon numerous stakeholders, it seems that substantive parts of the Proposed Guidance that will dictate whether or not a water is jurisdictional under the CWA should be subject to APA notice and comment rulemaking. While this appears to be EPA’s and the Corps’ intent, the specific highlighting of certain issues in the Proposed Guidance that will be subject to rulemaking, with silence on other equally controversial issues, leaves open the question of how much of the Proposed Guidance ultimately will be covered by a proposed rule. In any event, interested persons can take advantage of the sixty-day public comment period to help clarify EPA’s and the Corps’ understanding.


Connecticut DEP To Allow Public Participation In Industrial Storm Water Permitting

Posted on April 27, 2011 by Gregory Sharp


The Connecticut Department of Environmental Protection (“DEP”) has significantly changed the way storm water discharges from industrial facilities are regulated with the adoption of a new General Permit for Storm Water Discharges Associated with Industrial Activities (“GP”). The new GP becomes effective on October 1, 2011, but the deadline for facilities to submit renewal registrations is June 1, 2011. Approximately 1,500 facilities in the state are subject to the GP.

For the first time, the GP includes a public participation process to allow the public to comment on Storm Water Pollution Prevention Plans (“SWPPs”) before they are approved by DEP. The SWPPs contain the best management practices proposed by the registrant to minimize pollution from storm water run-off.

The public participation provision was added at the urging of environmental groups. They cited the Ninth Circuit’s decision in Environmental Defense Center, Inc. et al. v. EPA, 344 F. 3d 832, (2003), which addressed EPA’s general permit for Small Municipal Separate Storm Sewers (“MS4s”). It held that public participation was an essential part of the federal Clean Water Act permitting scheme, and that EPA’s failure to provide for public review of applications for coverage (Notices of Intent) under the MS4 general permit violated the intent of Congress. Id. at 856.

The new GP also expands monitoring requirements and sets enforceable "benchmark" concentrations, replacing the previous aspirational "target values".


Clock is Ticking on Compliance with New Offshore Regulations

Posted on April 1, 2011 by Eva Fromm O''Brien

Thirteen months. Seems like a long time, right? In many cases, thirteen months is enough time to buy or sell a major business unit, or perhaps even litigate a minor dispute to trial. In this light, it’s easy to think at first glance that thirteen months should be plenty of time to implement the Bureau of Ocean Energy Management, Regulation and Enforcement’s (“BOEMRE”) six-page regulation requiring offshore operators to adopt a Safety and Environmental Management System (“SEMS”) by November 15, 2011. 75 Fed. Reg 63619 (Oct. 15, 2010). Unfortunately, companies who delay preparations to implement 30 C.F.R. Part 250 Subpart S are in for an ugly surprise particularly given that there are now just eight months remaining in the race to compliance. The challenge is amplified because the new regulation adopts the American Petroleum Institute’s Recommended Practice 75 (“RP 75”) in its entirety, converting the formerly voluntary practices into required elements of the regulation. 30 C.F.R. § 250.1902(c).

In my experience, companies tackling the job of creating a SEMS program that is compliant with the new federal regulations have encountered a number of challenges. Although at least sixty percent of operators already have a SEMS program that incorporates many of the elements of RP 75, converting a voluntary program intended to assist companies with internally identifying and resolving weaknesses in environmental, health and safety performance into a full-scale regulatory program complete with public disclosure is a daunting prospect. As an initial matter, the sheer number of potentially-applicable elements is astounding—by my count the regulation imposes well over 150 separate requirements. In order to thoroughly address all applicable requirements, it is likely that many business units or departments will be involved in creating the SEMS plan. While the Health, Safety and Environmental divisions will be inexorably intertwined in the effort, departments that manage contractor relationships and training should also be involved. As with all endeavors that involve multiple personalities and levels of management, coordinating such a large group of people is bound to be taxing. In addition, creating or modifying training programs and rolling those out to employees will be time-consuming. When viewed as a whole, the thirteen-month period to achieve compliance is no walk in the park—for many companies it will be a sprint to the finish.

Although complying with the now-required API practices is a daunting task in and of itself, the regulations, though short, contain significant requirements in addition to RP 75. Most notably, the new regulations require companies to audit themselves and disclose the results of the audit to BOEMRE. The purpose of the audit is to identify areas in which safety and environmental performance need improvement. Under Subpart S, an audit must be conducted by an independent third-party or “designated and qualified” internal personnel. Id. § 250.1920. Before the audit is even conducted, the operator must submit an audit plan to BOEMRE thirty days prior to the audit. The audit plan will identify the facilities to be audited (the audit must cover at least 15% of the operator’s facilities), and the persons conducting the audit. BOEMRE reserves the right to strike a selected independent third party or designated and qualified personnel if they do not meet BOEMRE’s criteria; specifically, the auditor must have an appropriate background, education, technical capabilities, previous experience with BOEMRE requirements, and no conflicts of interest. BOEMRE may also modify the list of facilities selected for auditing. The first audit must be conducted within the first two years of adopting the operator’s SEMS plan; after that, the company may space its audits out by up to three years. The resulting audit report must disclose any deficiencies in the SEMS uncovered by the audit, and must be submitted to BOEMRE within thirty days of the audit’s completion. Along with the audit report, the operator must submit a plan that addresses any deficiencies identified by the audit report, and identifies the individual employee responsible for correcting each deficiency. Given the tough requirements imposed by BOEMRE’s auditing requirements, operators that are already comfortable with their SEMS plan should consider conducting a trial audit prior to the regulation’s effective date, as all audits conducted after November 15, 2011 must follow BOEMRE’s pre-approval and disclosure requirements. The audit should identify any gaps in compliance and provide a roadmap for areas needing corrective action before the November 15th deadline.


Posted on March 16, 2011 by Angus Macbeth

I am picking up the discussion on EPA’s proposed willingness to pay survey addressed to the fish mortality at once-through cooling water systems at electric power plants. Bill Green laid out the background of this issue in his February 17th post. The willingness to pay survey is designed to help EPA in writing its rule which will regulate cooling water intake structures at existing power plants. The Information Collection Request for the survey appeared in the Federal Register on January 21, 2011. EPA recently agreed to propose that rule by March 14, 2011, and it is understood that the proposed rule has been sent by EPA to OMB for review. The content of the proposed rule is not public, but the likelihood that it relies on a survey done after January 21 and before the end of February is very close to nil. So is it EPA’s plan to do the survey after the proposed rule is public and then use the results in writing the final rule? That’s hard to believe, since relying on significant new data generated by the Agency but not available at the time the rule was proposed is highly unlikely to pass muster under administrative law principles. Whatever EPA’s plan is here, it doesn’t follow the normal pattern of collecting the data, proposing the regulation, and then adjusting the final rule in light of comment from the public. I seem to remember something in Alice in Wonderland about proceeding in the reverse order.


Then one needs to look hard at the survey itself. It never makes clear to the public the basic biology that is at stake in fish mortality at power plant cooling water structures. Fish typically produce thousands of eggs over their lifetime. A single winter flounder can spawn 500,000 eggs each year and a single Atlantic cod can spawn 4-8 million eggs each year. Only two need to survive to maturity to maintain the population at its present size. Thousands of the early life forms will die – from starvation or being consumed by other fish or from being sucked into cooling water systems or from other causes. The number of cases where the mortality from cooling water systems has resulted in a demonstrable decline in mature fish populations is no more than a handful. Any cost-effective policy on cooling water intake structures at existing power plants would focus on those plants and not on power plants generally. Moreover, the policy would also take into consideration the remaining useful life of the plants in question. EPA’s survey does nothing to address these issues. Experts on willingness to pay surveys will undoubtedly have other and more telling criticisms of the survey, suffice it say that one may have serious doubts that it will produce information of real value.


It is now 39 years since the Clean Water Act was passed. Section 316 is one of the few sections in which EPA is directed to consider on an individual basis what the effect of particular industrial operations are on the aquatic biology. That is a serious and important issue. Assuming that EPA seriously intends to rewrite its Section 316 regulations on the basis of willingness to pay surveys, it may be 50 years after the passage of the Act before the Agency is able to get it all right.

Much Ado About Fracking

Posted on March 8, 2011 by Robert Kirsch

The year 2011 has begun much in the way 2010 ended. There is activity across the northeast and nationally about whether hydraulic fracturing, a technique used for decades in the petroleum industry, posses a risk to the environment and to drinking waters, in particular, when it is used as a technique for developing natural gas. So, what is happening, and what is at issue?

There are more regulatory proceedings and investigations underway than we will mention here. This representative sampling is just the tip of the iceberg. In Washington, the Environmental Protection Agency is in the process of beginning a study regarding the potential influences of hydraulic fracturing on drinking water. That study is in response to a request from Congress, and several members have been active on fracturing issues. In addition to the EPA investigation prompted by letters from representatives Waxman and Markey, representative Hinchey has reintroduced legislation that would authorize EPA to regulate hydraulic fracturing under the Safe Drinking Water Act. EPA also has sought information from fracturing companies pursuant to its TSCA authority, and more recently, by way of a subpoena.

Regionally, the Delaware River Basin Commission, an interstate compact established by Congress to address conditions within the Delaware River Basin, has proposed rules which would apply to natural gas development within the four member states. Among those states, New York is in the process of revisiting the question of whether and to what degree hydraulic fracturing merits further environmental analysis in the context of natural gas development, and Pennsylvania, a state with experience in developing energy resources, has put in place a fairly detailed set of rules and regulations governing various aspects of the activities associated with hydraulic fracturing. At DRBC public hearings so far in New York and Pennsylvania, the number of speakers has been balanced, if not slightly in favor of those who favor developing the energy resource.

But the action isn’t limited to politicians. Self promoters and celebrities also have entered the mix at the DRBC hearings. And, there is even a film nominated for an academy award (as a documentary) making the rounds. The film reportedly is based principally on anecdotes and aspects of it fall into that well known genre of fear mongering and half truths.

The action surrounding fracturing is likely to continue through the year. Natural gas is an energy source widely viewed as serving as a bridge fuel to a low carbon or no carbon future. The resources available by exploiting shale gas reportedly are adequate to address domestic energy needs for the foreseeable future. The question is, will science or emotion prevail in determining what diligence must be done by those seeking to develop this resource.

So, what does one draw from all this?

  1. Hydraulic fracturing has been used successfully by the energy industry for several decades. While there are anecdotal reports of environmental influences resulting from hydraulic fracturing practices, they reflect a minute portion of the tens of thousands if not hundreds of thousands of wells where the technique has been employed. When properly performed, the process is safe and environmentally sound.
  2. Much of the press for federal legislation seems to have originated from those offended at the exemption granted to industry by the Bush administration. In fact, the states where hydraulic fracturing has been in use for decades all have extensive regulatory programs. There may be little need for federal legislation.
  3. Interest by the Congress has been focused in the House. Most arose before the shift in power that occurred in November. It is not clear that the new Republican majority will have much appetite to fix what is not broken.
  4. The prospect of plentiful, domestic natural gas along with the economic benefits that will accompany development of those resources, is a powerful incentive for the state and local governments as well as for industry and labor organizations. Do not expect interest in hydraulic fracturing to diminish; but, do not expect the volume of complaints from opponents to diminish either.


Posted on March 4, 2011 by Ridgway Hall

On December 29, 2010, EPA published the largest total maximum daily load (“TMDL”) ever issued under the Clean Water Act. It imposes maximum loadings for nitrogen, phosphorus and sediment for the Bay and its 92 tidal segments, including loading allocations for major river systems in six states and the District of Columbia which drain into the Chesapeake. This TMDL was required because of widespread non-attainment of water quality standards for dissolved oxygen, clarity/underwater grasses and chlorophyll-a (a measure of algae levels). This non-attainment is caused by excess discharges of nitrogen, phosphorus and sediment, largely from human activities.

For decades, water quality in the Chesapeake Bay and its tributaries has been poor, resulting in fish kills, large “dead zones” in the summer time where no oxygen exists (and no fish can survive) and significant decreases in the annual harvests of fish, crabs, oysters and other shellfish from historic levels. There has also been a serious decline in wildlife habitat, including wetlands.

On May 12, 2009, President Obama issued Executive Order 13508 entitled “Chesapeake Bay Protection and Restoration”. The Order recognized the Chesapeake Bay as a “national treasure” and directed federal and state agencies to work together to develop strategies and programs “to protect and restore the health, heritage, natural resources and social and economic value of the nation’s largest estuary and ecosystem.” Led by EPA, the agencies issued a Strategy For Protecting and Restoring the Chesapeake Bay Watershed, which I described in an ACOEL blog article entitled “EPA Announces Strategy for Chesapeake Bay Restoration” posted May 27, 2010.

The TMDL is the centerpiece of the water quality restoration strategy. The Chesapeake Bay watershed covers 64,000 square miles in Maryland, Virginia, Pennsylvania, Delaware, West Virginia, New York, and the District of Columbia. The population is 27 million and growing. Rising human demands on the Bay and its watershed have outstripped the modest gains of past efforts.
Because the water quality problems involve multiple states and are technically complex, the states and the District of Columbia in 2007 asked EPA to take the lead in developing a multi-state TMDL. EPA did so, in close consultation with the states as well as local government officials and members of the public and interested stakeholder groups. The resulting TMDL calls for reductions in 25% of the nitrogen, 24% of the phosphorus, and 20% in sediment loadings below current levels. The goal is to have all necessary programs in place to achieve these reductions by 2025, and 60% in place by 2017.

Because the TMDL will require reductions from substantial numbers of non-point sources (such as agriculture and stormwater runoff), which EPA has no direct authority to regulate under the Clean Water Act, states have developed “Watershed Implementation Plans”, or “WIPs”, which embody the measures which each state will employ to achieve the required pollutant reductions. The effect of the WIPs is to give the states the first cut in selecting the mix of controls on various point and non-point sources to achieve a cost-effective solution. If a state’s WIP does not provide reasonable assurance of achieving the desired goals, EPA is prepared to use “backstop” allocations, emphasizing increased point-source regulation over which EPA has clear regulatory authority.

The WIP is a brand new tool in the TMDL toolbox, and its use by the Chesapeake watershed states should prove instructive for other impaired water bodies. Work is in progress at the state, county and local levels to carry out the plans. Principles of adaptive management are built into the system with annual reviews and two-year milestones to ensure progress towards meeting water quality standards. Both the TMDL and the WIPs were subject to extensive public comment, public hearings and meetings with affected sectors.

The cost of the necessary reductions will not be cheap. Wastewater treatment plants and storm sewer systems will need to be upgraded. Buildings and shopping centers will need to be designed and managed to sharply reduce stormwater runoff. Non-point source runoff from farming operations will require nutrient management plans and other best management practices. Federal and state funding and technical assistance are available to help.

Most importantly, the TMDL challenges everyone in the Chesapeake Bay watershed to put aside past differences and indifferences, and put in place the necessary programs and practices. Extensive information is available on EPA’s Chesapeake Bay TMDL web site . This includes the state WIPs and links to each state program.


Ridge Hall serves on the Board of the Chesapeake Legal Alliance. He can be reached at

EPA's Draft CWA Jurisdiction Guidance Is Leaked At Last

Posted on March 3, 2011 by Robert Lawrence

The suspense is over. Inside EPA just released EPA’s December 2010 Draft Guidance describing how EPA and the Army Corps of Engineers intend to identify jurisdictional waters under the Clean Water Act (CWA) and implement the U.S. Supreme Court’s decisions in Rapanos and SWANCC.  The Agency has yet to formally release the 2010 Draft Guidance. 


As anticipated, the 2010 Draft Guidance significantly expands the scope of waters over which EPA and the Corps assert jurisdiction. Indeed, the Draft Guidance unabashedly exclaims that, “the Agencies expect that the numbers of waters found to be subject to CWA jurisdiction will increase significantly compared to practices under the 2003 SWANCC guidance and the 2008 Rapanos guidance.” The Draft Guidance takes a dig at the 2008 Rapanos guidance stating that the older guidance “reflected a policy choice to interpret Justice Kennedy’s opinion narrowly, resulting in fewer waterbodies found to be jurisdictional under the CWA than under a more faithful interpretation.” 


The 2010 Draft Guidance, still marked as “Deliberative Process; Confidential”, would supersede EPA’s and the Corp’s December 2008 Revised Guidance on Clean Water Act Jurisdiction Following the Supreme Court Decision in Rapanos v. U.S. and Carabell v. U.S., and their 2003 “Joint Memorandum” which provides clarifying guidance on the Supreme Court’s SWANCC decision.   


The Draft Guidance rarely misses an opportunity to expand the scope of CWA jurisdiction as interpreted by the 2008 Rapanos guidance. For example, while the 2008 Rapanos guidance focused only on the CWA 404 regulations at issue in the Rapanos case, the 2010 Draft Guidance applies to decisions concerning “whether a waterbody is subject to any of the programs authorized under the CWA”, and expressly includes CWA sections 402 (NPDES), 311 (oil spill), 303 (water quality standards and TMDLs) and 401 (state water quality certification) programs.


The 2010 Draft Guidance begins with a broad interpretation of the meaning of “traditional navigable waters” and “interstate waters” for purposes of CWA jurisdiction. It says that waters will be considered “traditional navigable waters” if “they are susceptible for being used in the future for commercial navigation, including waterborne recreation . . . . A determination that a water is susceptible to future commercial navigation, including commercial waterborne recreation, should be supported by evidence.”   Of course it should! In contrast, the 2008 Raponos guidance mandated that a likelihood of future commercial navigation, including waterborne commercial recreation, “must be clearly documented” and “will not be supported when evidence is insubstantial or speculative.”  


The 2008 Rapanos guidance provided useful guidelines for the regulated community to determine what features would not be subject to CWA jurisdiction.   For example, the “Summary of Key Points” in the 2008 Rapanos guidance provided that the agencies generally would not assert CWA jurisdiction over “swales or erosional features (e .g., gullies, small washes characterized by low volume, infrequent, or short duration flow)”, or over “ditches (including roadside ditches) excavated wholly in and draining only uplands and that do not carry a relatively permanent flow of water.” 


This reasonable interpretation of features that are outside the scope of CWA jurisdiction under Rapanos is eliminated from the “Summary of Key Points” in the 2010 Draft Guidance. Later text in the 2010 Draft Guidance does retain the concept that such features generally are not subject to CWA jurisdiction: “Swales or erosional features (e.g., gullies, small washes characterized by low volume, infrequent, or short duration flow) are generally not waters of the United States because they are not tributaries or they do not have a significant nexus to downstream traditional navigable waters or interstate waters.” The Guidance emphasizes that “[e]rosional features such as gullies and rills are not part of the tributary system, are not jurisdictional waters, and shall not be assessed as part of the significant nexus determination.  Natural and man-made swales are also not tributaries for purposes of this guidance.”


However, the 2010 Draft Guidance “clarifies” that under certain circumstances ditches may be jurisdictional. If a ditch has a bed and bank and an ordinary high water mark, and connects directly or indirectly to a traditional navigable water, it is considered a “tributary” potentially subject to CWA jurisdiction like any other tributary, if: a) it is a natural stream that has been altered (e.g., channelized, straightened or relocated); b) it is excavated in waters of the U.S., including wetlands; c)  it has relatively permanent flowing or standing water; or d) the ditch connects two or more jurisdictional waters of the U.S. If a ditch or swale includes areas that meet the regulatory definition of “wetlands”, the ditch or swale must be evaluated to see if it qualifies as wetlands for purposes of CWA coverage.


The 2008 Rapanos guidance stated that the agencies will assert jurisdiction over non-navigable tributaries of traditional navigable waters that are relatively permanent where the tributaries “typically flow year round or have continuous flow at least seasonally (e.g., typically three months).”  The 2010 Draft Guidance deletes the “continuous flow” and “three month” clarifications, and instead asserts that non-navigable tributaries are subject to CWA jurisdiction if “they are relatively permanent, meaning at least seasonal.”  The 2010 Draft Guidance explains these changes were made because the “time period constituting ‘seasonal’ will vary across the country.  Rather than having distinct, rigid boundaries, stream reaches classified as perennial, intermittent, and ephemeral may more accurately be described as dynamic zones within stream networks.”


Under the 2010 Draft Guidance, more tributaries would be jurisdictional. The Draft Guidance takes the position that “a tributary continues as far as a channel (i.e., bed and bank) is present. A natural or man-made break (e.g., outcrop, underground flow, dam, weir, diversion or similar break) in the presence of a bed and bank or ordinary high water mark [OHWM] does not establish the limit of a tributary in cases where a bed and bank and an OHWM can be identified upstream and downstream of the break.”  This position is likely to substantially increase the number of jurisdictional tributaries, especially in the desert southwest, where many washes have miles upon miles where no beds and banks with identifiable OHWMs exist as a result of underground flows, outcrops, and man-made breaks.


The 2010 Draft Guidance indicates that tributaries with an OHWM and identifiable beds and banks will generally be considered jurisdictional if they are “part of a tributary system to a traditional navigable water or interstate water, and therefore can transport pollutants, sediments, flood waters and other materials to a traditional navigable water.” In contrast, the 2008 guidance provided that these were simply factors to evaluate in determining whether a significant nexus exists.


The 2010 Draft Guidance interprets the word “significant” in “significant nexus” to mean “more than speculative or insubstantial.”  The Guidance suggests that Justice Kennedy likely meant that “‘significant’ includes having a predictable or observable chemical, physical or biological functional relationship.”  It is debatable whether Justice Kennedy intended the word ‘significant’ to have this more expansive meaning.     


At this time, the fate of the 2010 Draft Guidance remains uncertain. The Guidance faces strong opposition from various industry groups and Congressional efforts to block its issuance. And it remains to be seen whether and the extent to which the Draft Guidance, if and when formally issued by EPA, will differ from the controversial December 2010 Draft.

Muddling Through: Clean Water Act Edition

Posted on March 1, 2011 by Seth Jaffe

Previously, I discussed EPA’s efforts to “muddle through” on climate change in the absence of comprehensive legislation. This week, I think it’s the Clean Water Act’s turn. If there were any regulatory situation which required some serious muddling through at the moment, interpretation of the Supreme Court’s Rapanos decision almost is a match for the current climate mess. As most of my readers know, Rapanos was a 4-1-4 decision which left EPA, the Corps, developers and environmentalists fairly equally perplexed

Most stakeholders have assumed that Kennedy’s concurring opinion, requiring a “significant nexus” between wetlands and traditional navigable waters before those wetlands are subject to jurisdiction under the CWA, is the law of the land at this point. That is the approach adopted in the Rapanos Guidance issued by EPA and the Corps in 2007. 

A recent decision by the 4th Circuit Court of Appeals, in Precon Development Corporation v. Army Corps of Engineers, illustrates just how muddled post-Rapanos interpretation has become. The decision in Precon – reversing the District Court – found that the Corps had not built a record sufficient to establish that the wetlands which Precon sought to develop were jurisdictional under the CWA. 

There were two technical issues in Precon. Precon lost what one might have thought would be the more significant issue – the Corps’ finding that, although only 4.8 acres were really at issue in this case, and Precon’s entire development includes 166 acres of wetlands, 448 acres of “similarly situated” wetlands would be examined for a substantial nexus to navigable waters. Precon ultimately won, however, because the Court concluded that the Corps’ record did not contain enough physical evidence to support its determination that a significant nexus exists between the 448 wetland acres and the downstream navigable water. 

The Court’s conclusion raised two issues of broad concern to stakeholders. First, the Court granted little deference to EPA’s conclusion on the significant nexus issue. The Corps argued that its conclusion that there was a significant nexus between the site wetlands and the downstream navigable waters was a factual conclusion. However, the Court concluded that the significant nexus determination was not factual. The Court stated that:

The question is instead whether the Corps’ findings were adequate to support the ultimate conclusion that a significant nexus exists. This legal determination is essentially now a matter of statutory construction, as Justice Kennedy established that a “significant nexus” is a statutory requirement for bringing wetlands adjacent to non-navigable tributaries within the CWA’s definition of “navigable waters.”

Well, this is certainly a nice question of administrative law. The significant nexus issue may now be the ultimate legal question. Nonetheless, I would guess that most wetlands scientists and hydrologists would say that this is largely a factual question. Even if the agency is applying its judgment to answer that question, it’s the type of judgment that requires technical expertise – expertise to which courts have traditionally deferred.

The second of the Court’s important pronouncements was that it would not give the EPA/Corps Rapanos Guidance deference under Chevron. Why not?

Because – although it could – the Corps has not adopted an interpretation of “navigable waters” that incorporates this concept through notice-and-comment rulemaking, but instead has interpreted the term only in a non-binding guidance document.”

Isn’t it timely, then, that EPA and the Corps sent a draft new Rapanos guidance to OMB in December, and GOP leadership in the House is proposing language in a continuing resolution that would preclude EPA from using any funds “to implement, administer, or enforce a change to a rule or guidance document pertaining to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act (33 U.S.C. 1251).” Perhaps EPA and the Corps should take half a loaf. Why not agree to shelve the guidance and instead proceed with notice-and-comment rulemaking to clarify Rapanos? At least then the Courts might grant EPA and the Corps more deference in implementation.  It’s already been almost five years since Rapanos was issued. EPA and the Corps can hardly argue that it’s necessary to go the guidance route because they don’t have the time to proceed through the full regulatory process.

Enough muddling through. Take the time to do it right and issue regulations. Then, maybe the muddle will abate. (Can one abate a muddle?)


Posted on February 22, 2011 by Richard Horder

Today, a drive through Georgia will present dozens of half-developed abandoned residential subdivisions, many having been graded and with various degrees of erosion control in place. However, the erosion control devices have not been maintained and are in disrepair. Such protection measures, if they even exist, fail to prevent Georgia red clay and other soils from rushing down the streets, causing damage to the proposed development as well as to neighboring down-gradient properties, and running off into nearby streams causing elevated turbidity and other problems.

Both federal and state environmental agencies are struggling to address this problem and have begun to develop regulations and guidelines to assign responsibility for reconstruction and continued maintenance of the soil and erosion control devices. Under a standard stormwater regime such as Georgia’s, prior to land disturbance activities, a developer must submit a Notice of Intent (NOI) to discharge stormwater under the state’s General Permit. Such permit is required for land disturbance of greater than one acre due to construction activities. Failure to obtain coverage under the General Permit or violation of the requirements of the Permit may result in daily fines. Typically, the developer is responsible for any violations or resulting fines. However, due to current economic conditions, many developers have abandoned their projects and are nowhere to be found, or have filed bankruptcy.

Thus, lenders are finding themselves left with loans secured by these properties and if they hope to recover on the collateral, they will have to confront the problems associated with them. The standard Phase I assessment does not consider stormwater compliance. Yet, many lenders foreclose on such properties without considering the consequences. The Clean Water Act under which the General Permit is issued does not have a secured creditor exemption and therefore, after foreclosure, lenders may be responsible as either an owner or operator. Lenders can then be liable for any permit violations and fines, which can range from hundreds to thousands of dollars. In addition, lenders may face the cost of maintaining continued compliance with soil and erosion control requirements and claims from down-stream property owners. Perhaps most importantly, savvy buyers will not relieve lenders of these problems, resulting in steep discounts at sale that may over-penalize relative to the real risk.

Georgia is in the lead among states in taking specific steps to impose stormwater liability upon lenders. In 2008, Georgia EPD issued new General Permits for Storm Water Discharges Associated with Construction Activity for Stand Alone Projects, Infrastructure Projects, and Common Developments. Under these new General Permits, a lender who acquires title to the construction site is directed to file a new NOI either seven days before beginning work at the construction site or thirty days from acquiring legal title to the property, whether the lender intends to carry out any land disturbance construction activities at the property or not. Under the permit and related regulations, EPD’s position is that a foreclosing lender essentially steps into the shoes of the former Permitee, assumes that Permitee’s obligations and must continue to comply with the General Permit. Obviously, this has serious implications for lenders, which are all too often discovered after it is too late.

However, it can be argued that these provisions of the new Permits stretch the boundaries of EPD’s authority. A defense to this broad assertion of liability for lenders lie in the fact that the lender (which may have to hold the property for years) does not intend to conduct any “land disturbance of one acre or more” on the property. It is that activity which would make the provisions of the General Permit applicable. Further, the General Permit does not specifically impose such obligation on a successor purchaser of the property who does not intend to carry out land disturbance activity. Why, then, should a foreclosing lender be treated differently than any other entity in Georgia solely because it has foreclosed on a property to protect its financial investment. The validity of this new provision has not been tested in court, but arguably would be subject to legal challenge.

Obviously, a lender who finds itself in this position would ideally undertake appropriate due diligence before foreclosing. The lender should determine what the actual status of the property is and whether foreclosing, and stepping into the shoes of the Permitee as EPD asserts, is worth the risk. For low value properties it may be better for the lender not to foreclose but instead to implement other strategies to realize on the collateral like note sales. On the other hand, if the lender does foreclose it certainly should take appropriate steps to protect itself from a number of risks, particularly claims from downstream property owners. Regardless of whether taking title makes sense, it may also be appropriate to take certain actions to stabilize the property, which could have the twin benefits of defusing regulatory scrutiny and removing a topic for negotiation with potential purchaser. In any event, following the General Permit provisions by filing an NOI and voluntarily stepping into the shoes of the previous Permitee may not be the wisest decision. A lender who does not take steps to preserve the ability to assert its defenses may be left holding a property for many years before it can be sold, and having to maintain soil and erosion control installations and continually monitor such devices for a significant period of time at a substantial cost. At a minimum, appropriate analysis needs to take place prior to foreclosure regarding which approach to use for recovery against the collateral in order for a lender to assess its risk and determine the best course of action.


Posted on February 18, 2011 by Fournier J. Gale, III

Last month, the Alabama Department of Environmental Management (“ADEM”) gained the Environmental Protection Agency’s (“EPA”) long-awaited approval of its proposed stormwater pollution regulations. EPA’s approval ends the looming threat it would take over Alabama’s stormwater permitting in the event ADEM did not cure certain deficiencies contained in previous draft regulations. EPA’s primary concern with ADEM’s previous draft regulations was that the regulations did not make clear exactly what obligations a local government had with respect to stormwater management. This issue has sparked intense debate from various groups over the last several months. One constituency, primarily builders and developers, argued that increasing local governments’ role in stormwater pollution prevention is unnecessary and wholly duplicative in light of ADEM’s existing regulations. On the other hand, various environmental groups contended that ADEM is simply ill-equipped to handle monitoring and enforcement responsibilities at the local level. Under the proposed regulations recently accepted by EPA, local governments must adopt local regulations to control runoff, conduct site inspections, and must have enforcement authority. EPA’s recent approval settles this dispute for the time being, but just as importantly, ends the threat that it would take over stormwater permitting in Alabama. It should be noted that the proposed regulations will not become final until ADEM has completed its review of and responded to the comments received during the rule making process.


Although EPA’s threat to take over Alabama’s permitting could be viewed as a strategic maneuver designed to hasten ADEM’s action, such a threat should not be taken lightly given EPA’s recent actions in Texas. EPA issued a series of rules and regulations that would bring greenhouse gases under the permitting programs of the Clean Air Act beginning January 2, 2011. To bring about these changes, EPA asked each state to revise and submit new state implementation plans to account for greenhouse gases. Several states publicly voiced their concern and disagreement with the rulemakings, but only Texas persisted in completely refusing to cooperate with EPA. After Texas failed to meet EPA’s deadline for submitting a revised plan, EPA sent Texas a letter stating that it would proceed with taking over Texas’s air permitting program. In response, Texas filed two petitions asking the Fifth Circuit Court of Appeals and the U.S. Circuit Court of Appeals for the District of Columbia to stay the EPA takeover. On December, 25, 2010, the Fifth Circuit denied Texas’s request for an immediate stay. While the D.C. Circuit issued a short-lived administrative stay, the court lifted the stay on January 12, 2011, determining that Texas had failed to meet “the stringent standards required for a stay pending court review.” While these rulings represent just one battle in the war between EPA and Texas, it remains to be seen how they will shape Texas’s strategy moving forward. Regardless of the ultimate outcome in this litigation, one thing is clear – the current EPA has demonstrated that it is not adverse to stepping in to take over state environmental regulatory programs in circumstances where EPA determines that the state agency is either unwilling or unable to implement federal law.



Posted on February 17, 2011 by William Green




On January 21, 2011, EPA published a final information collection request (ICR) as the first step in assessing the benefits of imposing what industry fears to be severe and costly measures to control fish being crushed against cooling water intake screens (impingement) or trapped in the cooling water as it flows through an electrical facility’s cooling water system (entrainment). 76 Fed. Reg. 3883. In early life stages, many fish that support commercial and sport fisheries are small enough to pass through screens installed to prevent the entrainment of larger individuals. The ultimate impact upon fish stocks, caused by the loss of juvenile and larval forms of many fish species, may be incalculable.


Long prior to the Clean Water Act and the existence of EPA, much of the nation’s energy needs was met through waterfront electrical facilities with large pipes and pumping systems referred to as cooling water intake structures (CWIS). The 1972 amendments to the Federal Water Pollution Control Act addressed the issues of impingement and entrainment with a single sentence requiring that “the location, design, construction and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impacts.” 33 U.S.C. § 1326(b); CWA § 316§(b). When EPA or an approved state issued a point source discharge permit under the National Pollutant Discharge Elimination System (NPDES), the permit writer would apply best professional judgment (BPJ) to assure that the CWIS of an electrical facility met that narrative standard in § 316(b) of the Clean Water Act. Some facilities were allowed to offset the presumed impacts upon fish populations with programs designed to restore fisheries such as constructing hatcheries and stocking juvenile sport fish species into nearby waters. Always at issue was the fundamental tension between growing energy needs and the potential impact the CWIS would have upon fish populations.

In 1993, environmental interests filed a citizen suit alleging that EPA had violated the Clean Water Act by failing issue regulations implementing § 316(b). Cronin, et. al. v. Reilly, 93 Civ. 0314 (S.D.N.Y 1993). EPA resolved that case by consent decree (and amendments) which ultimately allowed EPA to perform three phases of rulemaking: Phase I addressing new facilities, Phase II addressing existing facilities, and Phase III which applied to existing facilities not captured within the scope of Phase II. EPA’s Phase I and Phase II rules were challenged by Riverkeeper, Inc., and others, resulting in the Riverkeeper I decision of February 2004 and Riverkeeper II decided in January of 2007. Riverkeeper, Inc. v. EPA, 358 F.3d 174 (2d Cir. 2004); Riverkeeper, Inc. v. EPA, 475 F.3d 83 (2d Cir. 2007).

EPA’s Phase I rule, for the most part, survived judicial challenge. A provision that would continue to allow restoration measures to offset potential losses was struck down as inconsistent with the Clean Water Act. Very little of the Phase II rule survived the Riverkeeper II litigation, with the court remanding the rule back to EPA for another try. A key issue in that case, whether EPA was precluded from weighing environmental benefit against costs in implementing § 316(b), was taken to the United States Supreme Court. On April 1, 2009, a majority of the Court ruled that § 316(b) of the Clean Water Act does not preclude EPA from comparing costs to environmental benefit in determining the best technology available for minimizing adverse environmental impact from cooling water intake structures. Entergy, Inc. v. Riverkeeper, Inc., 129 S.Ct. 1498 (2009).

To date, EPA has not issued its new Phase II rule. In November of 2010, EPA executed a settlement agreement with parties to the original 1993 matter (“Cronin Plaintiffs”) and the Riverkeeper II parties dismissing the cases so long as EPA proposes new Phase II regulations by March 14, 2011, and then issues its final rule by July 27, 2012.


The ICR published January 21, 2011 will ask individuals from U. S. households whether or not they would support policies that would increase their cost of living “in exchange for specified multi-attribute changes” in (a) impingement and entrainment losses, (b) commercial fish populations, (c) long-term populations of all fish, and (d) condition of aquatic ecosystems. EPA estimates that is will poll 9,533 respondents by telephone while another 2,288 will be mailed questionnaires. EPA asserts that statistical analysis will result an estimate of Willingness-To-Pay (WTP) “for the quantified environmental benefits of the 316(b) rulemaking.” In a nation of approximately 312 million individuals, EPA intends to poll less than 12,000 respondents. There is no guarantee that all of those who are asked will participate in EPA’s survey. How this information will translate as support for EPA’s Phase II rule remains to be seen. Another round of litigation come July 2012, when EPA issues its final rule, may be on the horizon. 


Written by: William Green and Winston Borkowski.

Transboundary Water Quality Disputes -- What Once Was Old Is New Again

Posted on February 11, 2011 by Allan Gates

There is nothing new about transboundary water quality disputes under the Clean Water Act. Introductory classes on environmental law commonly trace the history of Supreme Court decisions arising from Milwaukee’s battles with Illinois over sewer discharges into Lake Michigan, the challenge Vermonters’ raised against New York paper mill discharges into Lake Champlain, and Oklahoma’s objections to a permit EPA issued to a sewage treatment plant in Arkansas. Given the length of time that the Clean Water Act program has been in place and the large number of instances in which upstream discharges drain into and therefore arguably affect water quality in downstream states, one would expect that most of the relevant legal questions would be well-settled. Recently, however, transboundary water quality disputes have arisen with increasing frequency.

Coal bed methane development in Wyoming has given rise to disputes with Montana over salinity impacts in the Powder and Tongue Rivers. Efforts by the state of Washington to protect dissolved oxygen levels in Spokane Lake have prompted a dispute over Washington’s attempt to impose wasteload allocations that would limit nutrient discharges by upstream sources in Idaho. Oklahoma’s efforts to restore the Illinois River to pristine scenic river conditions have resulted in recurrent and steadily intensifying disputes with agricultural interests on both sides of the border and point sources located predominantly in the headwaters on the Arkansas side. EPA’s imposition of nutrient water quality standards in Florida could have direct effects on discharges originating in Georgia; and the agency’s showcase multi-state TMDL for the Chesapeake Bay has recently precipitated challenges by state and national agricultural interests. In what undoubtedly is the most dramatic transboundary claim under the Clean Water Act, environmental groups have filed a petition with EPA asking the Agency to impose nutrient water quality standards and adopt TMDLs for the main stem of the Mississippi River, all of its tributaries, and certain related coastal waters in the Gulf of Mexico.

These recent disputes have recurring themes that arise out of weaknesses or unresolved questions regarding the Clean Water Act program. The statute empowers each state to exercise sovereign independence in adopting water quality standards that apply within the state’s own borders (so long as minimum federal standards are met), but the statute does little to address or even give consideration to the interests of other states that may be directly affected by those standards. Transboundary disputes frequently involve situations in which the regulatory burdens fall disproportionately on interests in one state while the resulting environmental benefits are realized largely or entirely in another state, but the Clean Water Act does nothing to address questions of transboundary fairness. Transboundary disputes frequently involve regulatory decisions that have enormous financial and long term planning consequences, but the decisions are often based upon limited factual data, imperfect scientific analysis, and less than comprehensive computer modeling. The Clean Water Act offers no process for seeking to assure that the quality of the decision making will be commensurate with the gravity of the consequences at stake. Indeed, the program largely makes the magnitude of financial consequences simply irrelevant. Disparities between the magnitude of the consequences and the limited quality of analysis and data supporting the regulatory decision are particularly problematic when the regulatory decision is being made by one jurisdiction that has no political accountability to the other.

It is perhaps no surprise that most of the recent transboundary water quality disputes are arising out of efforts to regulate the discharge of nutrients. Nutrient pollution is the largest unresolved water quality issue nationally; and the adverse effects of excess nutrients frequently occur at locations far downstream from the original source. The fact that most of the current transboundary water quality disputes involve nutrient pollution probably makes the disputes even more difficult than normal to resolve. Nutrient pollution has no simple, universally accepted means of measurement. It is costly and time consuming to establish a clear causal link between a given discharge of nutrients and an observed adverse effect; and many of the most important sources of nutrient pollution are non-point sources which are beyond direct control under the Clean Water Act. Unfortunately, this appears to be a recipe for increased frustration and controversy.
Transboundary water quality disputes may not be a new phenomenon, but it does not appear that we are any closer to finding a good way to resolve them.

New Rapanos Guidance Coming--Third Time's the Charm?

Posted on February 10, 2011 by Rick Glick

On December 20, the Environmental Protection Agency and the U. S. Army Corps of Engineers submitted draft guidance to the Office of Management and Budget to determine when wetlands are subject to regulation under the Clean Water Act. This will be the third attempt to provide guidance on implementing the conflicting standards announced by a fractured Supreme Court in Rapanos v. United States.

In an opinion written by Justice Scalia, a plurality of the Court declared that Clean Water Act jurisdiction extended only to wetlands of a semi-permanent nature that abut open water. This is a test that many wetlands, previously thought to be jurisdictional, would fail to meet. A concurring opinion offered by Justice Kennedy announced a wholly different standard: A water or wetland is jurisdictional if there is a “significant nexus” between the wetlands and navigable waters, focusing on whether there is “a reasonable inference of ecological connection” between the two. The dissent written by Justice Stevens and joined by three others, finds both tests wanting and suggests that jurisdiction is present when either is met.

Agencies and courts have since strained to reconcile these opposing views. EPA and the Corps have attempted to provide guidance on when and how to apply each test, the first in June 2007 and the second in December 2008. Courts have dutifully tried to discern clarity in the Court’s opinions and have given the joint agency guidance Skidmore deference, meaning they use the guidance to the extent it is persuasive. Considerable uncertainty remains in determining when permits are needed in many cases, causing obvious problems for the development community.

The Obama Administration favors a legislative fix, but Clean Water Act reform seems unlikely just now . . . or during my lifetime. There have been a lot of cases decided since the 2008 guidance was released, so the new guidance perhaps will distill that experience and give us something useful to work with. OMB review can take up to 90 days, so look for the guidance no later than the end of March.

EPA Section 404 Guidance For Surface Mining In Jeopardy

Posted on January 25, 2011 by Theodore Garrett

On January 10, 2011, the US district court in DC ruled that the mining industry is likely to succeed in challenging EPA's interim April 1, 2010, guidance on Clean Water Act (CWA) §404 permitting for surface mining projects in Appalachia, but denied industry's motion for a preliminary injunction. The decision, in a lawsuit brought by the National Mining Association, illustrates the pitfalls of agency regulation by guidance. The court’s opinion accepts the industry's arguments that EPA likely violated the notice-and-comment requirements of the Administrative Procedure Act and that EPA’s June 11, 2009 Enhanced Coordination Process memorandum, which subjects coal mining related §404 permits to enhanced scrutiny, “encroached upon the role carved out for the states under the Clean Water Act” However, the court held that the industry has not demonstrated the certainness of imminence of industry losses and, further, why any economic losses resulting from permitting delays “cannot ultimately be recovered if and when the mining projects in question are permitted to proceed.” The court denied the government’s motion to dismiss and held that the case is ripe for a determination on the merits, because no factual developments would clarify the issues.